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Chili's Franchise Cost & Fees

Date of Incorporation: 1975
Franchising Since: 1984
Headquarters: Dallas, Texas

Business Description: Chili’s Grill & Bar restaurants are full service restaurants featuring a casual dining atmosphere and a full service bar. Chili’s Special Venue is an abbreviated format that typically is based upon reduced square footage and/or a reduced menu. The franchisor is Brinker International Payroll Company, L.P.

Franchise Offer: Brinker offers qualified applicants a franchise arrangement for a Chili’s Grill & Bar or a Chili’s Special Venue restaurant. Chili’s Grill & Bar restaurants are full service restaurants featuring a casual atmosphere and a varied menu of freshly prepared appetizers, chicken, beef and seafood entrees, hamburgers and other sandwiches, salads, barbecue ribs, fajitas and other southwestern and Mexican-style cuisine, flatbreads, desserts and a full service bar. Chili’s Special Venues are abbreviated formats that typically are based upon reduced square footage and/or a reduced menu.

Financial Assistance: Brinker does not offer direct or indirect financing. Brinker does not guarantee any notes, leases or other obligations franchisees may make to others./p>

Training and Assistance: The Managing Owner or Operating Partner and up to 5 managers (if franchisees open only one Restaurant) or 10 managers (if franchisees open two or more Restaurants) must attend and complete initial management training program to Brinker’s satisfaction. All new managers hired by the franchisee and any Managing Owner or Operating Partner later appointed by the franchisee must attend and complete the initial training program to Brinker’s satisfaction. The initial training program will generally last 15 weeks. All required pre-opening training will be held at one of Brinker’s Certified Training Restaurants and must be completed to its satisfaction at least 2 months (but not more than 5 months) before the Restaurant opens. Brinker may require franchisees’ personnel to attend supplemental training programs. In addition to required training programs, Brinker may provide conferences for general managers in a designated area.

Territory: Franchisees will not receive an exclusive territory. Franchisees may face competition from other franchisees, from outlets that Brinker owns, or from other channels of distribution or competitive brands that Brinker controls.

Term of Agreement and Renewal: The length of the initial franchise term begins on the effective date of the Franchise Agreement and, unless terminated sooner, will expire on the last day of last calendar month of the 20th year following the date on which the franchised restaurant is opened for business. The term of the successor franchise agreement will be 20 years, if requirements are met.

Obligations and Restrictions: When franchisees sign the Agreements, they must designate an individual to serve as their “Managing Owner.” The same person must act as the Managing Owner under the Development Agreement and all Franchise Agreements between Brinker and the franchisee. If the franchisee is an individual, he/she will be the Managing Owner. If franchisees are operating as a corporation, a partnership or other business entity, the Managing Owner must (i) own the largest percentage share of ownership, but in no event less than 10%, (ii) be authorized by to bind franchisees in any dealings with Brinker and authorized distributors, suppliers, and contractors, (iii) be authorized to direct any actions necessary to ensure compliance with the Agreements, and (iv) unless an Operating Partner is appointed, devote his or her full time and best efforts to the operations of the Restaurant and operations under the Development Agreement with no operational or management commitments to other businesses. The Managing Owner must also satisfy our training requirements. Franchisees must use the Restaurant premises solely for the operation of the Chili’s Restaurant and must keep the restaurant open and in normal operation for the hours and days we specified or otherwise in writing. Franchisees must refrain from using or permitting the premises to be used for any other purpose or activity at any time without first obtaining Brinker’s written consent. Franchisees must meet and maintain the highest applicable health standards and ratings. Franchisees must operate the Restaurant in strict conformity with the methods, standards, and specifications Brinker requires.

Estimated Number of Units: 1,580

Investment Tables:
Initial Investment for a Chili's Grill and Bar
Name of Fee Low High
Initial Franchise Fee $40,000 $40,000
Leasehold Expense $6,000 $25,000
Pre-Construction $90,000 $400,000
Construction Works $1,090,000 $1,425,000
Site Work $150,000 $500,000
Exterior Signage $20,000 $80,000
Furniture/Fixtures/Sound System/TVs $135,000 $190,000
Kitchen/Bar/Equipment $300,000 $400,000
Opening Advertising $8,000 $10,000
Initial Training $60,000 $350,000
Opening Team Costs $65,000 $100,000
Working Capital $12,000 $22,000
Inventory $15,000 $20,000
Additional Funds $450,000 $600,000
Bar/Kitchen Accessories $40,000 $50,000
Liquor License Varies
System Installation $30,000 $45,000
ESTIMATED TOTAL $2,511,000 $4,257,000
Investment Tables:
Initial Investment for a Chili's Special Venue
Name of Fee Low High
Initial Franchise Fee $40,000 $40,000
Leasehold Expense $3,500 $20,000
Pre-Construction $45,000 $200,000
Construction Works $400,000 $1,000,000
Site Work $50,000 $300,000
Exterior Signage $15,000 $75,000
Furniture/Fixtures/Sound System/TVs $55,000 $100,000
Kitchen/Bar/Equipment $190,000 $300,000
Opening Advertising $5,000 $10,000
Initial Training $60,000 $350,000
Opening Team Costs $65,000 $100,000
Working Capital $12,000 $22,000
Inventory $8,000 $15,000
Additional Funds $225,000 $525,000
Bar/Kitchen Accessories $25,000 $35,000
Liquor License Varies
System Installation $25,000 $45,000
ESTIMATED TOTAL $1,223,500 $3,182,000
Other Fees
Type of Fee Amount
Royalty Fess 1.25% of Gross Sales.
Technical Services Fee 2.75% of Gross Sales.
Advertising Production Fee 0.5% of Gross Sales.
Local Advertising Program (LAP) Fee Minimum 2.5% of Gross Sales.
Regional Advertising Program (RAP) Fee Maximum 4% of Gross Sales.
National Advertising Program (NAP) Fee Currently, 2.40% of Gross Sales; Maximum – 4% of Gross Sales.
Supplemental marketing Programs Currently, 0.2% of Gross Sales.
Replacement and Supplemental Training Currently, $3,500 plus costs of the franchisee’s personnel attending training.
Product Testing Fee Approximately $1,500 per product annually typically charged to the supplier; additional product testing may be required due to specification noncompliance.
Supplier Facility Inspection Currently, approximately $1,025 per day plus travel expenses normally charged to the supplier or distributor.
Licensing Fees Currently, none.
Restaurant Inspection Varies.
Mandatory Sanitation and Food Safety Program (SAFE) Currently, approximately $262 per visit if you do not receive a passing grade. There is no charge for a grade of 0 (perfect score) to 1
Transfer Franchise/Development Agreements – $5,000 or any greater amount necessary to reimburse Brinker for its expenses, with a single transfer maximum of $25,000
Offering Franchise/Development Agreements – $10,000
Audit Cost of audit, including travel, lodging, wages, and legal and accounting costs.
Indemnification Lesser of 18% per annum or maximum legal rate (the maximum legal rate in California is 10% per annum).
Enforcement Costs Franchise/Development Agreements - Will vary.
Liquidated Damages for Unauthorized Solicitation of Employees Franchise/Development Agreements – 3 times the employee’s salary plus Brinker’s enforcement costs.
Liquidated Damages for Failure to Meet Development Schedule $10,000/month; Maximum period: 1 year.
Relocation or Reconstruction Minimum royalty and technical services fee agreed by the franchisee and Brinker.
Successor Fee 100% of the then-current Franchise Fee.
Décor Items, Certain Furniture and Fixtures Currently, the prices that Brinker charges its company-owned restaurants for the items, including a 15% administration fee; prices are subject to change with prior written notice.
Gift Cards Approximately $1,500 per year/per restaurant.

The above information has been taken from the FDD of Chili's. Year of FDD: 2015

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